By Swissquote Analysts
GSK 4Q Sales and Earnings Rose, Driven by Specialty Medicines, Vaccines
Topic of the day
GSK PLC posted rising earnings and sales for the fourth quarter, which the company said were boosted by its specialty medicines and vaccines businesses. The British pharma major reported net profit of 1.50 billion pounds ($1.85 billion) in the fourth quarter, up from GBP749 million for the same quarter of 2021, on sales that grew to GBP7.33 billion from GBP7.08 billion. Operating profit increased to GBP1.87 billion from GBP492 million in the fourth quarter of 2021, reflecting fair-value gains on investments, milestone income from disposals and lower remeasurement charges for contingent consideration liabilities, GSK said. After-tax profit also increased, rising to GBP1.62 billion from GBP930 million the previous year. Total earnings per share rose to 36.5 pence from 18.5 pence in 2021, and adjusted earnings per share increased to 25.8 pence from 23.6 pence, GSK said. The company reported a gain from the demerger of its consumer healthcare business–now named Haleon PLC–of GBP10.1 billion for the full year. GSK’s vaccines business was driven both in 2022 and in the fourth quarter by sales of its shingles shot Shingrix, which generated GBP3 billion in the full year and GBP769 million in the final quarter.
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Save for a few minutes at the start of the day's session, the Switzerland stock market was down in negative territory on Wednesday with investors choosing to exit several counters amid a lack of positive triggers. The mood remained cautious with investors looking ahead to the monetary policy announcement from the Federal Reserve. The benchmark SMI ended with a loss of 84.85 points or 0.75% at 11,200.93, after dropping to a low of 11,180.26. Novartis ended 2.7% down. The drug major reported sharply lower profit in its fourth quarter on lower sales and the absence of prior year's hefty Roche income. Roche Holding ended lower by 2.05%. Swiss Re drifted down by about 1.25%. Givaudan, Geberit, Logitech and Nestle posted modest losses. Credit Suisse gained about 2.6% and Sonova ended nearly 2.5% up. Partners Group, UBS Group, Holcim, Swisscom and ABB ended higher by 0.6 to 0.75%. In economic news, the Swiss procure.ch and Credit Suisse Manufacturing PMI fell to 49.3 in January of 2023 from 54.1 in the previous month, pointing to the first contraction for Swiss manufacturing since the pandemic-induced slump that ended in July 2020. The report said production levels fell by 3.9 points to 49.1, while new orders slid by 7.4 points to 43.3 and purchasing volumes sank 5.9 points to 43.6.
Despite spending much of the day's session in positive territory, the major European markets ended on a mixed note on Wednesday as the mood turned a bit cautious past mid afternoon with investors looking ahead to the Federal Reserve's monetary policy announcement. Investors digested the latest batch of economic data from the region, and corporate earnings updates. The pan European Stoxx 600 edged down 0.03%. The U.K.'s FTSE 100 ended 0.14% down, and France's CAC 40 edged lower by 0.07%. Germany's DAX advanced 0.35%, while Switzerland's SMI dropped 0.75%. Among other markets in Europe, Austria, Belgium, Iceland, Poland and Turkiye closed weak. Czech Republic, Denmark, Finland, Greece, Ireland, Netherlands, Norway, Portugal, Russia, Spain and Sweden ended higher. The Federal Reserve is widely expected to raise interest rate by 25 basis points. The accompanying statement and Fed Chief Jerome Powell's comments are in focus for clarity about the central bank's future interest rate hikes. The European Central Bank and the Bank of England are scheduled to announce their interest rate decisions tomorrow. In the UK market, Segro, Smiths Group, 3I Group, Ocado Group, RS Group, Johnson Matthey, CRH, Smurfit Kappa Group, WPP, Mondia, Berkeley Group Holdings, Standard Chartered, Taylor Wimpey, B&M European Value Retail and Associated British Foods gained 1 to 2.5%. Halma climbed higher after announcing it has acquired a manufacturer of fire detection products in a £22m deal.
U.S. stocks jumped Wednesday, erasing earlier losses, after the Federal Reserve said it had approved raising interest rates by a quarter of a percentage point. Markets' afternoon rally showed just how confident many investors have become that the Fed will end up lowering interest rates this year. Fed Chair Jerome Powell acknowledged that the central bank's interest-rate increases had begun to pull inflation lower. "We can now say, I think for the first time, that the disinflationary process has started," Mr. Powell said at a press conference following the central bank's meeting. But he pushed back against the idea that the central bank would consider cutting rates this year. Monetary policy doesn't yet look "sufficiently restrictive," he said. The S&P 500 closed up 42.61 points, or 1%, at 4119.21 after initially falling in reaction to the Fed's rate decision. The Nasdaq Composite Index advanced 231.77 points, or 2%, to 11816.32. The Dow Jones Industrial Average lagged behind its peers, gaining only 6.92 points, or less than 0.1%, to 34092.96. Corporate earnings continued to drive major moves Wednesday. Snap shares declined $1.19, or 10%, to $10.37 after the social-media company warned that sales in the current quarter are likely to drop and posted a wider net loss than Wall Street was expecting. Electronic Arts shares dropped $11.92, or 9.3%, to $116.76 after the videogame maker gave a disappointing outlook for its current quarter and said it would delay launching a highly anticipated Star Wars game.
The stock markets in Asia and Australia react cautiously positively to the US interest rate decision and the accompanying statement. Prices on the Chinese stock exchanges rise slightly. Shanghai Composite and HSI in Hong Kong rise by 0.1 and 0.3 per cent respectively. Interest rate-sensitive sectors such as semiconductors and software are up, following their US counterparts.
Meanwhile, in the U.S. bond market, the yield on the benchmark 10-year U.S. Treasury note declined to 3.398% from 3.527% the previous day. Yields fall when prices rise.
UBS raises Mediobanca target to EUR 10.50 (9) – Neutral
UBS raises BPER Banca target to EUR 2.90 (2.50) – Buy
JP Morgan lowers Teamviewer to Underweight (Neutral) – EUR 11 (12) target
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